INTERNAL  REVENUE  BILL. 


SPEECH 

OF 

HON.  JUSTIN  S.  MORRILL, 

OF  VERMONT, 

IN  THE  HOUSE  OF  REPRESENTATIVES,  MAY  7,  1866. 


The  House  resolved  itself  into  the  Committee 
of  the  Whole  on  the  state  of  the  Union,  (Mr. 
Washburne,  of  Illinois,  in  the  chair,)  and 
proceeded  to  the  consideration  of  the  bill  to 
amend  an  act  entitled  11  An  act  to  provide  in¬ 
ternal  revenue  to  support  the  Government,  to 
pay  interest  on  the  public  debt,  and  for  other 
purposes,”  approved  June  30,  1864,  and  acts 
amendatory  thereof. 

Mr.  MORRILL  said: 

Mr.  Chairman  :  Let  me  say  at  the  start,  lest 
gentlemen  should  be  too  much  frightened, 
that  the  great  length  of  the  bill  before  us 
mainly  arises  from  the  fact  that  the  Com¬ 
mittee  of  Ways  and  Means  thought  it  advis¬ 
able,  wherever  in  the  course  of  the  revision 
a  section  of  the  old  law  was  amended,  even 
though  but  slightly,  to  strike  out  the  old  sec¬ 
tion  and  reinsert  it  as  amended.  This  vastly 
swells  the  size  of  the  bill,  but  will  be  much 
more  convenient  for  those  who  are  to  interpret 
or  administer  the  law  hereafter.  In  revising 
our  internal  revenue  laws,  the  question  that 
meets  us  at  the  threshold  is,  how  much  rev¬ 
enue  have  we  to  spare?  Or  how  much  will  our 
necessities  require  for  another  year?  The  last 
question  has  been  specially  answered  by  the 
Secretary  of  the  Treasury,  who  has  fixed,  in  a 
recent  communication  to  the  committee,  $350- 
000,000 — provided  the  appropriations  of  Con¬ 
gress  do  not  exceed  the  estimates — as  the  sum 
it  would  be  safe  to, rely  upon,  including  the  rev¬ 
enue  from  the  tariff  as  well  as  internal  taxes. 
In  making  an  estimate  of  the  probable  receipts 
from  the  latter,  we  have  as  a  basis  one  full 
year  and  three  fourths  of  the  present  year  of 
experience,  and  the  data  are  sufficiently  com¬ 
plete  to  be  of  value.  Our  receipts  for  1864-65 
were,  in  round  numbers,  $210,000,000,  and 
the  returns  thus  far  of  1865-66  show  that  we 
may  expect  for  the  year  an  increase  of  nearly 
fifty  per  cent.,  or  not  less  than  from  three 
hundred  to  three  hundred  and  five  millions. 
One  of  the  largest  and  best  paying  consumers 
of  the  products  of  the  country  during  the  war 
was  the  Government,  but  is  so  no  longer.  War 
prices  no  longer  rule,  and  it  is  inevitable 
that  manufactures  must  be  still  further  reduced 
in  values  until  we  reach  the  solid  standard  of 
gold  as  recognized  by  the  commercial  world. 
The  tax  on  manufactures,  therefore,  must  be 


far  less  productive  for  the  year  ending  June 
30,  1867,  than  heretofore,  as  it  will  be  com¬ 
puted  at  a  less  percentage,  if  our  bill  should 
be  adopted,  and  on  a  far  less  aggregate  amount. 
Then,  as  a  general  rule  in  a  season  of  falling 
prices,  it  is  not  gains  but  losses  which  must  be 
calculated  at  the  end  of  the  year ;  and  there¬ 
fore  the  tax  on  incomes,  the  dividends  from 
banks  and  other  corporations  for  the  next  year, 
cannot  be  expected  to  yield  anything  like  the 
amount  derived  from  these  sources  for  the  years 
ending  December,  1864,  and  December,  1865. 
Nor  can  our  foreign  importations  be  maintained 
upon  their  present  scale.  It  is  very  desirable 
that  they  should  not  be  as  they  are  supplant¬ 
ing  a  large  share  of  the  labor  of  our  own  peo¬ 
ple,  and  because  payment  will  at  present  be 
made  chiefly  in  United  States  bonds.  Finan¬ 
cial  disaster,  as  well  as  increased  depression  to 
our  industrial  interests,  cannot  fail  to  follow 
such  an  influx  of  foreign  goods  as  we  have  wit¬ 
nessed  the  present  season.  That  trade  must 
in  some  degree  be  postponed  until  we  recover 
from  the  exhaustion  caused  by  the  war,  until 
capital  and  labor  can  adjust  itself  to  its  new 
conditions  of  peace,  or  until  we  have  some¬ 
thing  to  exchange  for  British,  French,  and 
German  iron,  wine,  and  haberdashery,  besides 
merely  our  national  credit. 

It  is  right,  however,  to  look  for  some  increase 
of  revenue  in  consequence  of  the  close  of  the 
war,  and  we  may  expect  something  from  the 
States  lately  in  rebellion,  though  not  an  amount 
in  proportion  at  all  to  their  relative  numbers. 
Never  fruitful  in  taxable  resources,  they  have 
less  now  than  ever.  If  we  obtain  outside  of 
the  receipts  from  cotton  enough  to  cover  the 
bills  already  passed  in  one  or  the  other  House 
for  extra  expenses  on  their  account,  it  will 
equal  my  expectations.  Taking  all  these  things 
into  consideration,  as  well  as  others  not  neces¬ 
sary  to  mention,  the  Committee  of  Ways  and 
Means  have  felt  willing  to  report  the  bill  as  it 
stands  ;  which  will  reduce  taxation  the  present 
year  in  round  numbers  about  seventy-five  mil¬ 
lion  dollars. 

It  is  also  prudent  to  anticipate  a  large  dim- 
inutionT1  of  the  revenue  from  customs,  as  it 
ought  not  to  be  expected  to  long  continue  at 
double  the  amount  ever  obtained  in  the  most 
prosperous  times.  Our  receipts  from  rniscel- 


2 


laneous  resources  the  coming  year  will  be  very 
light,  as  they  have  recently  accrued  mainly 
from  property  disposed  of  at  the  close  of  the 
war,  and  premiums  on  sales  of  gold,  sources 
already  nearly  extinct. 

We  seek  to  make  some  compensation  for 
these  losses  by  increasing  the  tax  on  raw  cot¬ 
ton  three  cents,  or  by  raising  it  from  two  to 
five  cents  per  pound.  Supposing  that  two  mil¬ 
lion  bales  should  be  raised  this  season  and  be 
taxed — and  I  think  the  amount  will  be  consid¬ 
erably  greater  notwithstanding  the  actual  want 
of  good  seed,  and  the  changed  system  of  labor 
— we  ought  to  obtain  a  revenue  from  this 
source  of  $44,000,000,  or  an  increase  over  the 
tax  at  present  in  force  of  $26,400,000.  The 
crop  may  so  far  exceed  the  number  of  bales 
mentioned  as  to  cover  all  the  cotton  which 
will  escape  taxation,  or  which  will  be  used 
on  plantations,  and  all  that  will  be  exported 
in  the  shape  of  manufactures  and  upon  which 
a  drawback  will  be  allowed;  but  it  will  be  safer 
to  estimate  probable  receipts  on  a  lower  basis. 
All  human  calculations  are  subject  to  contin¬ 
gencies,  and  financial  calculations  are  perhaps 
most  exposed  to  be  shipwrecked  of  all ;  but  if 
we  retain  the  tax  on  cotton  as  proposed,  we 
can  safely  release,  in  my  opinion,  taxes  to  the 
extent  contemplated  by  the  bill.  Otherwise 
we  must  reinstate  something  already  stricken 
out  of  the  roll  of  taxation  by  the  bill,  or  find 
some  new  source  of  revenue  which  will  pro¬ 
duce  an  equal  amount ;  and  I  say  this  without 
feeling  very  confident  that  the  rates  for  the 
income  tax  will  be  allowed  to  be  changed  much 
from  the  existing  law. 

Treasury  receipts  for  fiscal  year  ending  June  30,  1865. 


Customs . $84,928,000 

Internal  revenue . 209,464,000 

Miscellaneous .  35,175,126 


Total  receipts,  exclusive  of  loans . $329,567,126 


Estimated  Treasury  receipts  for  fiscal  year  ending  June 

30,  1866. 

Customs  receipts  to  April  1, 1866,  (actual) 

(coin) .  $128,967,375 

Internal  revenue  to  April  1, 1866,  (actual)  243,890,548 
Miscellaneous  (actual)  premium  on  gold. 

Ac .  37,183,309 


Actual  aggregate  receipts  to  April  1..  410,041,232 
Estimated  custom  receipts,  April  1  to 

June  30 .  30,000,000 

Estimated  internal  revenue,  April  1  to 

June  30 .  60,000,000 

Estimated  miscellaneous,  April  1  to  June 
30 .  1,500,000 


Total  aggregate  receipts  from  all 
sources  for  the  fiscal  year  ending 
June  30, 1866 .  $501,541,232 


Estimate  of  receipts  for  the  fiscal  year  ending  June 

30, 1867. 

Customs .  $125,000,000 

Internal  revenue .  260,000,000 

Increase  on  cotton .  15,000,000 

Increase  on  spirits .  15,000,000 

Miscellaneous .  10,000,000 


Requirements  of  the  Secretary  of  the  • 
Treasury .  350,000,000 


Available  for  reduction  of  taxation .  $75,000,000 


It  will  be  seen  that  I  estimate  a  reduction  in 
the  revenue  received  from  manufactures,  on 
account  of  a  depreciation  of  values,  of  about 
twenty-five  per  cent.,  and  a  reduction  upon 
incomes  and  dividends  of  rather  more  than  that 
amount.  It  is  true  that  we  shall  be  likely  to 
have  a  more  perfect  administration  of  the  law; 
and  I  take  pleasure  in  saying  that  the  present 
Commissioner  is  a  most  diligent  and  conscien¬ 
tious  officer;  but  the  increase  of  revenue  on 
this  account  will  be  at  least  counterbalanced 
by  many  little  favors  distributed  all  through  our 
amendments,  and  which  it  is  impossible  to 
accurately  estimate. 

We  could  not,  if  we  would,  levy  an  export 
duty  upon  cotton,  and,  except  for  convenience 
of  collection,  an  excise  tax  may  be  better,  as, 
in  the  form  it  is  here  proposed,  it  is  not  neces¬ 
sarily  to  be  paid  by  the  planter,  and  may,  in 
the  same  manner  that  we  now  transport  spirits, 
be  removed  from  one  collection  district  to  any 
one  other,  upon  giving  bonds  for  the  payment 
of  the  tax  within  ninety  days,  or  upon  its  ar¬ 
rival  at  its  place  of  destination.  The  duties 
will  practically  thus  be  paid  by  the  purchaser. 
In  addition  to  this,  while  we  guard  our  political 
citadel  here  against  the  dangers  of  any  insidi¬ 
ous  treason  from  any  quarter,  when  it  comes 
to  taxation  we  should  not  only  be  just  but  gen¬ 
erous,  and  the  drawback  on  manufactured  cot¬ 
ton,  of  all  the  taxes  actually  paid,  in  any  form, 
will  redound  most  to  the  benefit  of  southern 
and  western  States.  They  will  at  once  manu¬ 
facture  coarse  cottons  and  yarns  and  warps 
much  more  extensively  than  they  have  hither¬ 
to  done.  And  the  southern  people  will  be  the 
last  to  surrender  the  system  of  a  tax  on  cotton, 
when  once  it  shall  be  adopted  and  understood. 
Until  the  production  of  cotton  shall  be  so  large 
as  to  reduce  the  price  below  twenty  cents  per 
pound,  or  exceeds  the  wants  of  the  world,  this 
tax  will  not  be  greatly  felt  by  Americans. 
Should  the  tax  at  any  time  operate  adversely 
to  our  interests,  as  I  do  not  think  it  can  at 
present,  it  must  be  reduced  or  removed  as  ex¬ 
perience  shall  seem  to  require.  Surely,  if  the 
entire  cotton  crop  of  the  United  States,  save 
what  we  consume,  could  be  exported  in  a  man¬ 
ufactured  state,  or  even  in  a  partially  manu¬ 
factured  state,  instead  of  exclusively  as  a  raw 
material,  it  would  be  an  end  worthy  of  states¬ 
men,  covering  our  country  with  blessings,  and, 
wronging  no  man,  would  do  much  toward  ex¬ 
tinguishing  resentments  and  restoring  kindly 
feelings  throughout  the  land.  The  southern 
coast,  and  the  banks*  of  the  Rio  Grande,  the 
Mississippi,  the  Mobile,  the  Tennessee,  and  the 
Savannah  would  soon  be  decorated  and  en¬ 
livened  by  factories,  giving  employment  to 
thousands,  and  bringing  the  culture  and  con¬ 
tentment,  the  social  life  and  comforts  of  organ¬ 
ized  industry  into  regions  wrhere  hitherto  useful 
labor  has  worn  the  badge  of  dishonor.  The 
saving  in  freightage,  and  in  the  cost  of  food, 
will  secure  at  least  handsome  profits — possibly 
large  profits — to  those  who  may  engage  in  the 
business.  With  prosperity  human  nature  is 
rarely  disposed  to  make  war.  Make  the  South 
prosperous,  and  we  make  them  our  friends. 


3 


X 


With  freedom  for  all,  and  with  such  measures 
as  will  induce  them  to  work,  they  may  become 
prosperous,  and  that  through  the  policies  of 
the  national  Government.  Even  though  the 
cotton  crop  the  present  season  should  be  but 
a  half  of  the  standard  crop,  the  price  will  be 
so  great  that  the  South  will  realize  more  money 
from  it  than  in  any  year  of  our  previous  his¬ 
tory,  as  the  laws  of  trade  for  the  last  seventy 
years  prove  that  a  short  crop  is  always  more 
valuable  than  a  full  one,  and  hence  the  uni¬ 
form  effort  to  hide  the  fact  of  a  great  crop. 

The  shrinkage  of  cotton  in  the  process  of 
manufacture  is  about  fifteen  percent.,  and  that 
amount  will  be  lost  to  the  manufacturer  in  the 
drawback,  and  gained  to  the  Government.  The 
principle  is  not  novel.  We  return  duties  upon 
imported  goods  when  reshipped,  and  we  gladly 
allow  spirits,  tobacco,  and  all  sorts  of  domestic 
manufactures  to  go  out  of  the  country  without 
the  payment  of  any  internal  tax.  If  it  were 
possible  to  ascertain  with  any  precision  the  tax 
paid  on  other  raw  materials  when  manufactured 
for  exportation,  as  we  can  on  cotton,  as,  for 
example,  upon  leather  or  iron,  we  should  con¬ 
sider  it  unquestionably  wise  to  refund  the  full 
amount  paid. 


1853 

1856 

1860 

1863 

1865. 


Exports  of  the  Manufactures  of  Cotton. 

. $8,018,652 

.  6,583,109 

. j .  5,141,044 

.  954,835 

.  764,761 


The  largest  export  trade  we  have  ever  known 
of  the  manufactures  of  cotton  was  in  1853,  when 
it  was  a  trifle  over  eight  million  dollars ;  but  in 
consequence  of  the  low-priced  Surat  cotton  and 
the  lower-priced  labor  of  Europe  it  has  steadily 
declined  since  that  time,  and  during  the  late 
war  pearly  ceased,  not  reaching  $1,000,000 
in  1865.  Pass  the  present  law,  however,  and 
we  shall  speedily  have  restored  to  American 
manufacturers  and  American  merchants  the 
full  amount  of  the  foreign  trade  we  ever  enj  oyed , 
and  in  due  time  our  country  will  assume  that 
supremacy  in  the  cotton  trade  of  the  world  to 
which  it  is  so  legitimately  entitled. 

The  system  of  levying  a  tax  upon  home  man¬ 
ufactures  would  never  have  been  drehmed  of 
but  for  the  grave  necessities  of  the  hour.  Our 
Treasury  was  exhausted  ;  our  people  were  un¬ 
used  to  paying  taxes  ;  a  large  party  among  our 
people  were  not  in  harmony  with  the  idea  of 
maintaining  the  Union  at  all  hazards  and  at 
any  cost ;  loans  at  home  could  only  be  obtained 
at  first  in  driblets ;  among  foreign  nations,  with 
aristocracies  everywhere  dominant,  it  was  an 
irrepressible  joy  for  the  organs  of  public  opin¬ 
ion  to  speak  of  our  country  as  “  the  late  United 
States;”  among  them  all  there  was  no  Louis 
XVI  to  send  us  a  man  or  to  fend  us  a  dollar, 
or  (with  the  single  exception  of  Russia)  even 
to  bid  us  God- speed  in  the  task  of  putting  down 
a  rebellion  the  most  wicked  in  the  annals  of 
mankind;  and  a  war — not  a  little  war,  but  a 
great  war — such  as  our  country  must  and  will 
always  wage,  if  it  wages  any,  of  illimitable  pro¬ 
portions  had  already  begun.  Under  these  cir¬ 
cumstances  we  girded  up  our  loins  and  became 
self-reliant — alone  but  independent — and  built 


up  the  credit  of  the  great  American  Republic 
in  the  hearts  of  our  own  people  ;  made  them 
see  and  feel  that  it  would  be  safe  to  trust  it, 
by  seeking  objects  of  taxation  which  would 
yield  promptly  and  yield  abundantly.  The 
experiment  proved  a  success.  During  the 
whole  term  of  the  war  it  was  borne  by  our  man¬ 
ufacturers  and  by  our  whole  people,  not  only 
without  complaint  but  absolutely  without  in¬ 
jury,  for  it  is  even  doubtful  whether  they  ever 
enjoyed  a  season  of  greater  prosperity.  The 
law  was  new  and  therefore  not  polished  and 
perfected  by  experience  or  revision,  but  first 
put  into  operation  by  the  distinguished  gentle¬ 
man  from  Massachusetts,  [Mr.  Boutwell,]  it 
at  once  vindicated  the  propriety  of  its  princi¬ 
ples  and  policy.  Often  amended  subsequently 
in  consequence  of  the  increasing  wants  of  the 
Treasury — bearing  the  misfortune  of  frequent 
changes,  too,  in  its  chief  administrative  offi¬ 
cers — it  soon  brought  forth  most  bountiful  sup¬ 
plies  and  disclosed  a  resource  of  unequaled 
magnitude  that  can  be  used  in  any  sufficiently 
urgent  crisis,  and  which  is  an  ample  requital, 
rendered  at  the  hour  of  our  greatest  need?  for 
all  the  protection,  direct  or  indirect,  ever  be¬ 
stowed  upon  the  products  of  domestic  indus¬ 
try.  Without  these  products  of  a  free  people 
we  should  have  been  as  weak  as  our  foes,  and, 
if  not  vanquished,  we  should  have  retired  after 
a  single  indeterminate  campaign. 

To  illustrate  the  wonderful  fecundity  of  a 
tax  on  manufactures  take  but  a  single  instance : 
the  little  stamp  tax  of  onecentuponeachboxof 
matches  produced  last  year  about  fifteen  hun¬ 
dred  thousand  dollars,  or  enough  to  arm,  trans¬ 
port,  and  keep  in  the  field  fifteen  hundred  men. 
And  this  tax  had  not  only  to  contend  with  the 
stocks  on  hand  but  for  some  time  with  exten¬ 
sive  fraudulent  importations.  The  tax  may 
be  expected  to  produce  much  more  hereafter. 

But  now  the  duties  of  peace  return,  and  we 
must  simplify  our  laws,  reduce  the  burdens 
of  tax-payers  so  far  as  possible,  and  cheapen 
the  cost  of  living.  All  cannot  be  done  at  once. 
We  shall,  do  the  best  we  can,  leave  something 
to  be  done  by  the  next  Congress  and  by  future 
Commissioners  of  Revenue.  At  an  early  day 
spirits,  malt  liquors,  tobacco,  cigars,  cotton, 
stamp  taxes,  and  perhaps  a  small  number  of 
other  objects,  it  is  to  be  hoped,  with  custom 
duties,  will  afford  revenue  commensurate  with 
all  the  wants  of  the  Government.  The  fixed 
economy  of  all  civilized  nations  requiring  large 
revenues  appears  to  be  to  squeeze  out  of  those 
articles  considered  as  luxuries  by  mankind — 
or  which  sustain  and  soothe  but  never  slake 
habits  deplored  by  good  men  everwhere — the 
largest  sums  which  the  most  stringent  laws  will 
secure,  and  our  practice  in  this  respect  from 
this  time  forward  should  doubtless  conform  to 
that  of  the  world.  Some  changes  are  now  pro¬ 
posed  relative  to  tobacco  and  cigars,  concern¬ 
ing  the  utility  of  which  I  have  serious  doubts. 
I  fear  the  door  which  for  the  past  year  seemed 
effectually  closed  will  be  again  opened  to 
fraudulent  practices,  and  that  the  revenue  as 
well*as  the  honest  dealer  will  suffer.  Still  we 
must  noPbe  deaf  to  any  well-founded  com- 


4 


plaints  of  the  people.  I  know  that  gentle¬ 
men,  for  whose  opinions  and  wishes  I  have 
great  respect,  from  districts  where  low-priced 
tobacco  is  produced  find  their  people  clam¬ 
orous  for  grading  the  tax  according  to  values. 
On  the  face  of  it  the  claim  would  seem  to  be 
just.  But  I  am  told  by  officers  connected  with 
the  administration  of  the  internal  revenue  laws 
that  the  law  as  it  now  stands  is  working  well, 
and  that  the  tax  on  smoking  tobacco  should 
not  be  reduced.  Experts  believe  that  any  fair 
discrimination  cannot  be  honestly  enforced, 
and  the  loss  to  the  Treasury  may  be  large. 
The  tobacco-growing  and  manufacturing  inter¬ 
est,  it  is  true,  has  been  and  is  now  greatly 
depressed,  but  not  so  much  on  account  of  the 
form  or  amount  of  the  tax  as  on  account  of  the 
large  influx  of  untaxed  tobacco  which  flowed 
into  our  markets  upon  the  cessation  of  the 
rebellion ;  and  it  may  be  added,  too,  that  our 
tariff  upon  foreign  cigars  is  much  too  low. 

The  bill  proposes  to  wholly  exempt  from  tax¬ 
ation  many  articles,  and  to  largely  reduce  it 
upon  others,  and  among  these  will  be  found 
slaughtered  animals,  salt,  sugar,  starch,  coal, 
soap,  vinegar,  saleratus,  clothing,  and  boots 
and  shoes.  These  exemptions  and  reductions 
will  lessen  family  expenditures  and  be  a  relief 
to  all  classes  of  the  community.  Dress-makers 
and  milliners,  wielding  a  potent  influence,  as 
they  do,  will  no  longer  be  treated  as  men,  sub¬ 
ject  to  taxation,  but  as  deserving  of  favor. 
Though  they  may  tax  us,  we  do  not  propose  to 
tax  them.  Provisions  or  products  of  the  farm 
it  has  been  the  policy  from  the  start  (and  its 
wisdom  has  been  only  exceptioifelly  questioned) 
to  keep  free  from  taxes.  All  fertilizers,  drain¬ 
ing  tiles,  and  many  of  the  more  expensive  im¬ 
plements  of  agriculture  it  is  now  also  proposed 
to  relieve.  Freights,  perhaps  the  most  inde¬ 
fensible  tax  we  have  had,  perpetually  checking 
commerce  and  adding  to  the  price  of  purchases 
as  well  as  diminishing  the  price  of  sales,  it  will 
be  seen  are  to  be  utterly  abandoned,  as  are  all 
the  articles  in  schedule  A,  except  gold  watches, 
silver  plate,  billiard  tables,  and  carriages  val¬ 
ued  above  $300,  as  by  the  testimony  of  the 
collectors  the  tax  upon  all  the  other  articles 
therein  embraced  amounted  to  less  than  the 
cost  of  collection,  while  it  imposed  domiciliary 
visits,  always  obnoxious  to  a  spirited  people. 
It  has  been  considered  important  not  to  check 
any  enterprise  for  building  or  for  repairs  of 
buildings,  and  to  this  end  building  materials, 
such  as  brick,  freestone,  marble,  slate,  roofing- 
slate,  lime,  and  cement,  have  been  placed  on 
the  free  list.  The  tax  imposed  upon  paper,  books, 
and  binding,  entertained  with  little  hospitality 
from  the  first,  is  surrendered  the  first  oppor¬ 
tunity  without  regret.  The  tax  on  knowledge, 
as  i'  has  often  been  styled,  if  it  ever  existed, 
it  is  to  be  hoped  will  be  now  abandoned.  The 
tax  upon  all  repairs,  always  indefinite  and  of 
dubious  propriety,  may  also  well  be  removed.  If 
a  horse  runs  away  with  a  carriage,  or  a  locomo¬ 
tive  gets  smashed,  it  seems  oppressive  for  the 
Government  to  seize  the  opportunity  of  such 
misfortunes  for  levying  a  fresh  tax. 

We  have  proposed  to  exempt  coal  from  any 


tax.  If  we  regard  it  as  an  article  of  fuel  we 
cannot  any  longer  afford  to  dealers  the  excuse 
of  a  tax  for  a  dear  price.  If  we  look  upon  it 
as  the  raw  material  from  which  gas  is  made,  the 
tax  on  the  latter  would  seem  to  be  as  great  as 
we  ought  to  subject  an  article  so  indispensa¬ 
ble  to  the  population  of  all  our  cities  and  most 
considerable  towns.  If  we  look  upon  it  as 
the  chief  source — the  hidden  giant — of  steam 
power,  which  drives  so  large  a  part  of  our  ma¬ 
chinery  used  in  manufactures,  from  which  so 
much  of  our  revenue  accrues,  it  certainly  pre¬ 
sents  strong  claims  to  be  free. 

Iron  being  an  article  of  such  large  consump¬ 
tion,  shaped  into  such  multifarious  forms  for 
the  use  of  mankind,  employing  numbers  so 
vast  in  its  production,  and  an  abundant  supply 
being  almost  a  prerequisite  in  peace  or  war  to 
national  independence,  the  Committee  of  Ways 
and  Means  have  been  willing  to  wholly  exempt 
pig  iron,  railroad  iron,  railroad  iron  rerolled, 
when  in  the  form  of,  and  to  leave  but  three 
dollars  per  ton  upon  bar  iron.  Cheap  iron  is 
an  advantage  to  the  whole  country,  and  espe¬ 
cially  so  to  agriculturists,  to  artisans,  and  even 
to  the  day  laborer  who  wields  but  an  ax  or  a 
spade.  It  is  also  important  that  we  should  not 
discourage  railroad  enterprises  by  making  their 
cost  so  great  as  to  frighten  away  all  capitalists. 
Our  iron  should  be  made  at  home,  but  let  us 
give  our  own  people  a  fair  chance  to  make  it 
cheaply. 

That  the  universality  of  a  tax  upon  all  de¬ 
scriptions  of  manufactures,  in  any  state  or  con¬ 
dition  when  offered  for  sale,  tends  to  a  dupli¬ 
cation  of  taxation,  is  sufficiently  obvious,  and 
the  Committee  of  Ways  and  Means  have  sought 
to  remedy  this  evil  so  far  as  they  could  consist¬ 
ently  with  their  duty  to  the  Government,  whose 
wants  though  diminishing  are  still  imperative. 
The  increase  of  the  tax  on  all  manufactures 
last  year,  one  fifth,  or  twenty  per  cent.,  as  our 
law  of  last  year  provided  for,  it  is  now  pro¬ 
posed  to  repeal.  Steel  being  in  the  nature  of 
a  raw  material,  a  manufacture  in  its  infancy 
and  in  some  peril  from  the  pressing  competition 
of  the  Old  World,  it  is  deemed  expedient  to 
entirely  exempt  from  tax,  and  more  especially 
as  it  will  mostly  be  taxed  when  it  reaches  a 
more  advanced  stage  of  manufacture.  The  same 
argument  applies  to  iron,  which  we  have  not 
yet  felt  able  to  wholly  release ;  and  also  to  cop¬ 
per,  lead,  zinc,  and  brass,  which  we  do  propose 
to  release.  The  bill,  however,  will  show  for 
itself.  The  reductions  have  been  made  with 
the  sole  view  of  the  greatest  good  of  the  great¬ 
est  number ;  and  in  the  main  I  hope  they  will 
be  accepted  by  the  House.  It  is  very  likely  to 
be  true  that  many  articles  not  now  relieved  can 
be  pointed  out  having  equal  claims  with  those 
proposed  for  favor ;  but  the  answer  is,  civilly 
but  firmly,  the  time  for  those  has  not  yet  ar¬ 
rived.  The  release  of  the  tax  upon  many  arti¬ 
cles  has  not  been  done  so  much  to  favor  them 
or  any  particular  branch  of  manufacture  as  to 
favor  those  which  remain  still  bearing  the  bur¬ 
den  of  taxation. 

The  removal,  so  far  as  it  at  present  seemed 
prudent,  of  the  constant  duplication  of  taxes, 


5 


will  certainly  tend  to  diminish  the  cost  of  a 
large  number  of  articles,  but  until  we  reach  the 
solid  basis  of  a  currency  equal  in  value  to  coin, 
prices  must  remain  dear  and  unstable,  and  pro¬ 
ducers  and  manufacturers,  while  working  under 
circumstances  of  inflated  cost,  will  be  exposed 
to  the  chances  of  making  sales  in  a  falling  mar¬ 
ket.  The  reduction  must  come  at  some  time, 
and  the  pain  will  be  severe  if  it  comes  suddenly, 
or  lighter  if  it  comes  more  slowly.  It  is  the 
same  in  the  sum  total  whether  hastened  or 
retarded. 

Savings  banks,  or  provident  institutions — by 
far  the  most  appropriate  napae — it  will  be  seen 
are  to  some  extent  relieved  from  the  tax  on 
deposits,  entirely  relieved  when  such  deposits 
are  invested  in  United  States  securities  or  when 
made  in  sums  not  exceeding  $500  by  any  one 
person.  It  cannot  be  doubted  that  it  is  sound 
public  policy  to  induce  those  having  but  small 
earnings  to  establish  a  habit  of  thrift  and  econ¬ 
omy  by  using  these  savings  banks  as  a  place  of 
trust.  Does  it  not  speak  well  for  the  character 
of  our  people,  as  well  as  that  of  our  country, 
that  these  institutions  now  hold  of  these  small 
earnings  of  the  common  people  $500,000,000? 
Where  else  can  a  similar  fact  be  cited?  Wo¬ 
men,  young  persons,  and  those  unskilled  in 
making  loans  and  taking  securities,  who  pos¬ 
sess  too  little  to  be  reached  separately  by  taxes, 
should  not  be  taxed  when  assembled  together, 
but  rather  deserve  the  paternal  care  of  the 
Government. 

The  tax  on  the  gross  receipts  of  express  com¬ 
panies  was  raised  in  the  bill  as  first  reported 
from  three  to  five  per  cent.,  but,  upon  further 
consideration, "in  the  revised  bill  the  rate  has 
been  restored  to  what  it  is  now  by  existing  law. 
When  we  are  reducing  taxation  in  every  direc¬ 
tion,  it  appeared  too  invidious  to  single  out  one 
class  of  business,  and  that  one  giving  marked 
distinction  to  American  enterprise,  and  doom 
it  to  a  tax  equal  to  twelve  or  fifteen  per  cent, 
upon  its  net  annual  receipts. 

The  tax  upon  telegraph  companies  has  also 
been  placed  upon  the  same  level,  or  reduced 
from  five  to  three  .per  cent.  One  of  the  com¬ 
panies  last  year  paid  to  the  Government  a  tax 
upon  $700,000  gross  receipts,  amounting  to 
$35,000,  when  they  had  made  an  absolute  loss 
of  $100,000,  or  $65,000  besides  the  tax. 

Express  and  telegraph  companies  may  not 
all  deal  liberally  with  the  people,  and  may  seek 
extravagant  profits,  but  the  Government  of  the 
United  States  could  hardly  be  expected  to  base 
its  legislation  upon  resentments  thus  engen¬ 
dered  unless  the  companies  were  the  creatures 
of  its  own  creation.  Such  abuses  are  more 
properly  corrected  by  State  legislation,  or  by 
even  the  more  potent  influence  of  competition 
and  public  opinion. 

The  tax  in  schedule  A,  although  one  of  an 
inquisitorial  character,  and  therefore  objec¬ 
tionable  in  form,  has  been  retained  in  part  by 
the  committee  on  the  ground  that  the  own¬ 
ers  of  carriages  valued  at  over  $300,  and  gold 
watches  and  silver  plate,  were  among  those 
persons  best  able  to  contribute  something  to 
the  support  of  that  Government  under  wdiose 


protection  they  have  been  able  to  acquire  arti¬ 
cles  indicative  of  wealth  and  assured  means  of 
support. 

The  law  in  relation  to  licenses,  it  will  be  seen, 
has  been  entirely  changed  in  form,  although 
the  substance  of  the  tax  will  be  found  adher¬ 
ing  to  it.  A  special  tax  takes  its  place,  and 
will,  it  is  supposed,  do  equal  service  without 
being  liable  to  the  objections  made  in  some 
quarters  that  it  is  an  attempt  to  regulate  the 
internal  commerce  of  the  States.  Members 
of  the  House  are  aware  that  a  case  is  still  pend¬ 
ing  in  the  Supreme  Court  of  the  United  States 
involving  the  constitutionality  of  the  existing 
license  law,  and  that  this  case,  after  having 
been  tried,  was  considered  of  so  much  impor¬ 
tance  as  to  be  postponed  until  next  term,  when 
the  decision,  whatever  it  may  be,  will  be  an¬ 
nounced.  I  do  not  suppose  that  the. court  will 
be  very  eager  to  overturn  the  legality  of  laws 
which  find  precedents  in  our  Statutes-at- Large 
almost  from  the  foundation  of  the  Govern¬ 
ment,  but  other  gentlemen  may  think  differ¬ 
ently,  and  from  abundant  caution,  as  we  are 
revising  the  internal  revenue  laws,  and  as  the 
technical  objection,  if  there  be  one,  can  be  so 
easily  removed,  the  Committee  of  Ways  and 
Means  have  made  the  alterations  to  meet  any 
circumstances  that  may  arise,  whatever  they 
may  be.  There  is  no  necessity  for  transcend¬ 
ing  our  legitimate  authority,  which  is  merely  to 
obtain  the  proper  amount  of  lawful  revenue  in 
the  least  objectionable  form. 

It  is  not  proposed  at  this  time  to  change  the 
rate  of  the  tax  on  spirits  nor  upon  malt  liquors, 
mainly  that  we  may  have  the  law  of  high  rates 
in  operation  a  sufficient  length  of  time  to  test 
its  real  value  for  revenue  purposes,  and  inci¬ 
dentally,  no  doubt,  its  value  as  a  mode  of  repres¬ 
sion  in  the  consumption  of  intoxicating  bever¬ 
ages.  For  the  largest  revenue  purposes,  the 
rate  of  two  dollars  per  gallon,  although  the  time 
elapsed  since  its  adoption  is  too  brief  to  defi¬ 
nitely  settle  the  question,  seems  likely  to  prove* 
unsatisfactory ;  and  if  it  were  an  original  ques¬ 
tion,  the  recommendation  of  one  dollar  per  gal¬ 
lon-  by  the  revenue  commission  would  not  be 
disregarded  by  the  Committee  of  Ways  and 
Means.  It  is  very  clear  that  the  whole  tax 
fails  to  be  collected,  as  the  price  has  at  no  time 
or  at  any  place  been  equal  to  the  cost  of  spirits 
with  the  tax  added  thereto,  and  in  some  parts 
of  the  country  the  price  has  occasionally  been 
below  even  the  amount  of  the  tax.  The  amount 
of  spirits  of  domestic  manufacture  returned  to 
the  assessors  for  1865  was  16,936,778  gallons 
as  against  85,285,391  gallons  in  1864,  show¬ 
ing  a  falling  off  of  nearly  four  fifths  of  the 
whole  amount.  It  is  to  be  noted,  however,  that 
much  was  distilled  in  1864  in  expectation  of 
an  increase  of  the  tax,  and  this  accounts  for 
a  diminished  business  in  1865,  but  does  not 
prove  a  diminished  consumption.  Notwithstand 
ing  the  heavy  increase  of  duties  upon  foreign 
liquors,  the  total  importations  have  not  been 
materially  curtailed.  Our  experience  is  likely 
to  correspond  with  that  of  the  world,  which  is, 
that  the  appetites  of  men  for  spirituous  liquors 
are  held  in  check  very  little  by  high  cost  unless 


6 


that  cost  is  very  exorbitant,  and  only  those  in 
the  most  indigent  circumstances  check  the  reg¬ 
ularity  of  their  indulgence  or  surrender  any 
portion  of  their  accustomed  allowance. 

It  is  curious  to  note  that  iron  manufacturers, 
in  making  up  the  calculation  of  the  increased 
cost  of  a  ton  of  iron,  put  in  $2  50  as  the  increased 
cost  of  whisky,  and  the  employer  is  compelled, 
no  doubt,  to  increase  the  amount  of  his  monthly 
pay-roll  to  cover  this  new  item  in  the  cost  of 
living.  It  may  be  inferred  that  the  consumption 
of  liquors  in  the  length  and  breadth  of  the  land 
is  as  large  as  ever,  but  that  the  tax  has  not 
been,  possibly  cannot  be,  collected.  The  great 
temptation  to  illicit  distillation  and  to  smug¬ 
gling  which  arises  in  cases  of  the  imposition 
of  high  duties  upon  liquors  calls  for  the  enact¬ 
ment  of  stringent,  almost  despotic  laws,  not 
merely  for  the  punishment  of  fraudulent  prac¬ 
tices,  but  for  the  protection  of  the  honest  im¬ 
porter  and  honest  distiller.  Owling,  or  the 
carrying  of  wool  out  of  the  kingdom,  was  for¬ 
merly  punished  in  England  by  the  imposition 
of  heavy  penalties,  and  we  have  found  that  the 
introduction  from  Canada  of  tin  babies  filled 
with  whisky  by  their  reckless  parents  can  only 
be  suppressed  by  heavy  penalties  and  by  their 
prompt  enforcement.  That  a  large  trade  has 
been  carried  on  the  past  year  in  the  manufac¬ 
ture  of  small  copper  stills  there  is  abundant 
evidence.  If  these  should  be  suffered  to  be 
used  clandestinely,  as  it  is  to  be  apprehended 
may  have  been  the  design,  not  only  would  the 
Government  be  deprived  of  a  large  amount  of 
revenue,  but  public  morals  would  be  more  or 
less  debauched.  The  Committee  of  Ways  and 
Means  recommend,  with  some  modifications,  a 
large  part  of  the  changes  in  the  law  as  to  spirits 
proposed  by  the  revenue  commission  in  order 
to  increase  its  efficiency.  It  is  believed  that 
the  country,  as  well  as  Congress,  are  in  favor 
of  obtaining  the  maximum  amount  of  revenue 
from  spirits,  and  that  we  are  not  so  eager  to 
reduce  the  cost  of  intoxicating  liquors  as  to  be 
unwilling  to  wait  until  experience  has  fully 
tested  the  policy  or  impolicy  6f  the  highest 
rate  of  taxation  as  now  fixed  by  law.  It  is 
understood  that  the  method  of  mixing  wood- 
acid  with  alcohol,  as  practiced  in  England,  so 
that  alcohol  might  be  used  in  the  arts  and  man¬ 
ufactures  without  the  payment  of  any  tax,  has 
proved  a  failure,  it  having  been  found  that  such 
methylated  spirit  can  be  rectified  and  made  into 
pure  spirit  again  without  any  offensive  smell. 
If  any  chemical  preparation  could  be  found 
which  would  accomplish  this  object  its  discovery 
and  adoption  would  be  a  great  relief  to  many 
legitimate  branches  of  arts  and  manufactures. 

The  Committee  of  Ways  and  Means  have 
proposed  some  modifications  of  the  income 
law,  but  have  not  reached  the  conclusion, 
while  the  industrial  employments  must  remain 
to  a  considerable  extent  heavily  burdened, 
that  it  can  yet  be  wholly  dispensed  with.  By 
its  terms,  as  originally  passed,  it  was  to  expire 
in  1870,  and  thus  a  temporary  character  was 
put  upon  its  face.  In  our  great  emergency  it 
contributed,  not  to  be  returned  again  with  in¬ 
terest,  a  larger  amount  than  the  richest  bankers 


in  Europe  would  have  loaned  to  us  even  at  sixty 
per  cent,  discount.  Our  loyal  people  paid  the 
income  tax  of  1863,  in  June,  of  $20,740,451  33, 
and  then  (estimated  upon  the  same  lists)  they 
were  called  upon  in  four  months  to  pay  another 
income  tax,  and  they  responded  by  contributing 
$28,929,312  02.  Again,  in  1864  their  income 
tax  foots  up  $59,000,000.  I  point  to  these  facts 
not  only  as  a  proud  evidence  of  their  patriot¬ 
ism  and  wealth,  but  as  a  proud  evidence  of  their 
strict  integrity  of  character.  Strong  as  the 
temptation  might  be  for  evasive  returns,  sore 
as  they  might  be  in  consequence  of  the  swift 
pursuit  and  the  continuous  exactions  of  the  tax 
gatherer,  they  even  paid  more  in  1863  upon  the 
second  call  than  the  first.  Their  country  was 
in  need,  and  even  the  greed  for  gain  could  not 
tempt  the  American  people  to  defraud  their 
Government.  The  law  left  it  almost  to  the 
conscience  of  each  man  as  to  how  much  he 
should  pay,  and  all  seemed  to  vie  with  each 
other  as  to  who  should  pay  the  most.  I  ques¬ 
tion  whether  any  people  evei*paid  a  tax  more 
honestly  and  accurately,  and  I  question  still 
more  whether  any  free  people  ever  imposed 
upon  themselves,  through  their  chosen  Repre¬ 
sentatives,  taxes  so  thick  and  fast. 

If  our  income  tax  should  be  contemplated 
as  a  part  of  the  permanent  policy  of  the  coun¬ 
try  it  is  not  to  be  denied  that  it  would  need 
various  and  perhaps  fundamental  amendments. 
The  objections  to  such  laws  are  sufficiently 
obvious. 

1.  They  are  inquisitorial  of  necessity  in  their 
•character,  and  Americans,  like  people  else¬ 
where,  though  not  averse  to  a  knowledge  of 
the  secrets  of  others,  are  quite  unwilling  to  dis¬ 
close  their  own.  Among  commercial  men  such 
disclosures  may  be  disastrous.  If  they  show 
prosperity  they  invite  envy  and  greater  com¬ 
petition  5  or  if  they  show  any  remarkable  lean¬ 
ness  they  damage  credits. 

2.  The  temptation  to  make  understatements 
and  lend  to  these  statements  the  sanction  of 
an  oath  tends  to  sap  and  mine  public  morals, 
until  men  begin  to  excuse  themselves  for  their 
own  wrong  doing,  because,  it  being  so  common, 
that  to  do  otherwise  would  be  to  fail  in  average 
smartness. 

3.  When  we  take  into  consideration  the 
sources  from  which  income  is  derived,  the 
habitudes  of  the  different  persons  who  pay  the 
tax,  the  difficulty  of  apportioning  it  so  that 
each  will  have  paid  in  just  proportion  to  every 
other  person,  leaving  each  relatively  in  the  same 
conditions,  the  perplexities  become  almost 
insurmountable. 

Entertaining  such  views,  and  the  pressing 
exigency  having  passed,  we  have  undertaken  to 
lessen  but  not  to  entirely  remove  the  weight  of 
the  income  tax.  To  this  end  we  propose  to 
exempt  the  first  $1,000  of  every  person  from 
any  tax  and  only  to  reach  any  excess  beyond 
that  amount.  This  will  increase  the  sum 
exempt  from  $600  to  $1,000.  Exactly  how 
much  of  a  reduction  it  will  make  in  our  receipts 
cannot  be  foretold,  but  probably  not  over  ten 
to  fifteen  per  cent.,  while  it  is  likely  to  diminish 
the  number  of  persons  taxed  nearly  one  half. 


7 


If  it  should  excuse  fifty  thousand  persons,  then 
the  reduction  will  amount  to  $1,000,000  for 
every  such  fifty  thousand  persons.  There  is 
perhaps  no  just  reason  for  excusing  any  portion 
of  the  income  of  any  one  from  the  tax,  except 
that  of  the  hardship  and  the  inability  of  persons 
with  a  limited  income  to  spare  any  part  of  it, 
but  that  is  enough. 

In  a  republican  form  of  government  the  true 
theory  is  to  make  no  distinctions  as  to  persons 
in  the  rates  of  taxation.  Recognizing  no  class 
for  special  favors,  we  ought  not  to  create  a  class 
for  special  burdens.  Pursuing  this  principle  a 
majority  of  the  Committee  of  Ways  and  Means 
have  agreed  to  that  portion  of  the  bill  which 
makes  the  income  tax  after  this  year  a  uniform 
one  of  five  per  cent,  upon  the  annual  gains. 
The  loss  Jo  the  revenue  will  be  large — about 
$17,000,000 — and  it  will  be  for  the  House  to 
say  whether  the  bill  shall  stand  as  reported  or 
whether  relief  in  any  other  direction  is  more 
urgently  demanded. 

I  shall  append  to  my  remarks  an  appendix 
containing  an  estimate,  made  with  the  aid  of 
the  office  of  the  Commissioner  of  Internal  Rev¬ 
enue,  of  the  reductions  appearing  to  me  likely 
to  occur  in  consequence  of  the  present  revision 
of  the  law.  Other  gentlemen  may  differ  from 
me  and  count  upon  greater  compensations  to 
counterbalance  these  reductions ;  but  I  have 
never  found  that  sanguine  financial  predictions 
were  safe  for  legislators. 

In  our  list  of  exemptions  we  strove  to  reach 
earliest  those  articles  upon  which  a  reduction 
of  cost  would  bring  relief  to  the  masses  of  our 
people,  and  those  which  are  produced  with 
such  lean  margins  of  profit  as  to  be  opposed 
and  in  danger  of  being  annihilated  by  even  so 
small  a  tax  as  five  or  even  three  per  cent., 
which  is  not  unfrequently,  upon  branches  of 
industry  closely  cornered  by  foreign  competi¬ 
tion,  in  excess  of  what  may  be  considered  reg¬ 
ular  and  satisfactory  profits. 

I  know  that  many  gentlemen  will  render  val¬ 
uable  assistance  in  the  progress  of  the  bill,  and 
all  will  feel  bound  to  show  that  they  are  alive 
to  and  not  unmindful  of  the  interests  of  their 
respective  localities,  and  some  may  wish  to 
press  amendments  giving  such  interests  fur¬ 
ther  relief;  and  it  is  fair  to  allow  a  prominent 
record  of  the  fact  to  appear  in  the  Globe  ;  but 
if  the  House  shall  reach  the  conclusion  that 
we  have  proposed  measures  which  will  reduce 
the  revenue  as  much  as  it  will  be  prudent  to 
do  this  year — keeping  in  view  the  unestimated 
drafts  our  legislation  has  made  and  is  likely  to 
make  upon  the  Treasury — remembering,  in  the 
large  operation  of  funding  our  national  obli¬ 
gations  so  that  they  may  bear  the  lowest  rate 
of  interest,  that  fifty  millions  now  may  be  more 
important  to  success  than  two  hundred  mil¬ 
lions  at  a  later  period — I  trust  that  the  good 
sense  and  forecast  of  members  will  lead  them 
to  vote  down  propositions  for  essential  changes. 

The  result  of  the  labor  of  the  Committee  of 
Ways  and  Means  is,  that  of  the  headings  in  the 
Commissioner’s  report  of  the  “  receipts  from 
specific  and  general  sources”  fifty-nine  out  of 
two  hundred  and  sixty-four  will  no  longer  be 


required,  and  the  number  of  articles  released, 
in  proportion  to  the  whole  number  remaining 
taxed,  is  still  greater. 

The  law  authorizing  the  Secretary  of  the 
Treasury  to  assign  to  the  Bureau  of  Internal 
Revenue  a  sufficient  force  to  carry  it  on  will 
expire  by  its  own  limitation  on  the  1st  of  July 
next,  and  it  therefore  becomes  necessary  to 
make  some  arrangement  for  the  permanent 
organization  of  the  bureau.  It  will  be  seen  that 
the  bill  makes  provision  for  this  object.  The 
operations  of  this  bureau  are  now  on  so  large  a 
scale  as  to  require  the  services  of  able,  clear- 
■  headed  men,  trained  to  business,  and  of  unques¬ 
tioned  integrity.  Such  men  in  our  country  are 
highly  prized,  and  command  the  highest  salaries 
paid  in  financial  and  commercial  employments, 
and  unless  we  fix  salaries  at  an  adequate  or 
competing  point  we  shall  only  command  the 
services  of  second-rate  men.  The  bane  of  the 
Treasury  Department  is  that  so  soon  as  officers 
receive  the  stamp  of  its  confidence  they  receive 
a  loud  call  and  the  offer  of  more  pay  to  go 
elsewhere.  The  best  officers  are,  therefore, 
often  mere  birds  of  passage,  here  to-day  but 
may  be  gone  to-morrow.  The  Bureau  of  In¬ 
ternal  Revenue,  it  is  quite  apparent,  is  deficient 
in  executive  force.  It  is  impossible  that  the 
Commissioner,  however  faithful  and  industri¬ 
ous,  and  I  know  of  no  man  more  so,  should 
be  able  to  consider  all  the  complicated  cases 
daily  arising  for  investigation  in  the  adminis¬ 
tration  of  his  office,  and  we  have  conceded  not 
only  the  propriety  but  the  absolute  necessity 
of  reenforcing  the  office  by  two  additional 
deputies  and  one  solicitor. 

Notwithstanding  all  the  disadvantages  we 
have  labored  under  in  putting  new  and  untried 
laws  suddenly  into  operation,  it  is  gratifying 
to  find  that  the  expense  of  collecting  the  rev¬ 
enue  has  been  far  less  than  was  anticipated — 
including  everything  except  printing  done  by 
the  Public  Printer — amounting,  in  1865,  to  no 
more  than  two  and  seventy-five  one  hundredths, 
or  two  and  three  fourths  per  cent.  This  con¬ 
trasts  most  favorably  with  the  cost  of  collection 
in  Great  Britain,  where,  after  years  of  experi¬ 
ence,  the  cost  varies  from  four  and  one  quarter 
to  five  and  three  fourths  per  cent. 

The  services  of  the  gentlemen  employed  on 
the  revenue  commission,  I  have  no  doubt,  are 
properly  appreciated  by  Congress,  as  they  will 
be  by  the  country,  and  the  Committee  of  Ways 
and  Means  were  unanimously,  I  believe,  of  the 
opinion  that  this  kind  of  service  should  not  be 
entirely  discontinued.  Believing  that  at  least 
one  similar  officer  can  be  profitably  employed 
permanently,  they  have  added  a  section  to  the 
bill  for  this  purpose,  and  I  have  no  doubt  it  will 
prove  wise  economy  to  adopt  and  continue  it 
so  long  as  we  may  be  compelled  to  raise  any¬ 
thing  like  our  present  revenues  from  taxation. 

The  military  power  of  the  United  States 
j  needs  no  eulogiums  from  any  quarter.  Its 
supremacy  at  home  is  not  likely  to  be  ques¬ 
tioned,  and  when  it  is  challenged  elsewhere  it 
will  be  time  enough  to  answer  back.  Its  finan¬ 
cial  power,  also,  even  in  the  agonies  of  civil 
strife,  has  been  vindicated.  No  stain  of  dis- 


8 


honor  rests  upon  its  credit.  Every  promise 
has  been  kept  with  entire  good  faith.  No  cred¬ 
itor,  holding  the  obligations  of  the  nation,  has 
had  to  do  more  than  to  ask  and  receive.  No 
faithful  soldier  has  closed  his  service  without 
receiving  at  the  same  moment  with  his  honor¬ 
able  discharge  the  last  dollar  due.  Is  there, 
then,  any  lurking  danger  as  to  our  present  and 
future  financial  condition  ?  The  confidence  of 
the  people  in  their  own  Government  cannot  be 
shaken  ;  the  vigor  and  elasticity  of  American 
industry  is  unrivaled;  our  resources,  abundant 
to-day,  will  be  greater  to-morrow  ;  no  empire, 
ancient  or  modern,  ever  received,  daily  or 
annually,  revenues  of  equal  magnitude,  and 
the  wealth  hidden  in  some  of  our  single  mount¬ 
ains,  if  it  could  be  placed  in  the  balance,  would 
make  our  national  debt  kick  the  beam.  Where, 
then,  is  the  cloud  no  bigger  than  a  man’s  hand? 
It  rises  only  in  that  quarter  from  whence  dis¬ 
loyal  representatives  may  come.  Open  and 
inchoate  repudiators  lust  for  power.  Save  us 
from  these  and  the  United  States  Government 
will  survive,  with  its  credit  and  civil  glories  ra¬ 
diant  with  youth  and  the  fame  of  ages,  long  after 
the  final  chapter  in  the  history  of  anti-repub¬ 
lican  Governments  shall  have  been  written. 

Appendix. 

Estimated  deductions  on  articles  exempted  and  partly 


exempted  from  tax. 

Animal  charcoal .  $3,000 

Alum .  5,000 

Beeswax .  3,000 

Barrels,  casks,  boxes .  250,000 

Blooms,  slabs,  loops . : .  60,000 

Boots  and  shoes .  4,400,000 

Brass,  roiled  sheet  copper . 

Sheathing  and  yellow  metal .  700,000 

Building-stone  of  all  kinds,  burr-stones, 
grind-stones,  monuments,  rooting  slate, 

slabs  and  tiles .  400,000 

Brick,  draining-tiles  and  water-pipes .  282,000 

Bichromate  of  potash .  30,000 

Blue  vitriol  and  copperas . . .  10,000 

Coffins  and  burial  cases .  50,000 

Crucibles .  10,000 

Crates  and  baskets .  15,000 

Crutches,  artificial  limbs,  eyes,  and  teeth...  25,000 

Copper,  lead,  and  tin . 400,000 

Clothing .  11,600,000 

Feather-beds,  mattresses,  Ac .  125,000 

Fertilizers  of  all  kinds .  100,000 

Flasks  and  patterns .  5,000 

Gloves  and  mittens .  30,000 

Gold-leaf  and  foil . 32,000 

Hemp  and  jute  prepared  for  textile  pur¬ 
poses .  25,000 

Hubs,  spokes,  felloes,  wooden  handles  for 

tools  and  implements .  175,000 

Hulls  of  ships  and  other  vessels .  500,000 

Income,  increase  of  exemption  from$600  to 

$1,000 .  3,000,000 

Income,  reduction  from  ten  to  five  percent. 

on  sums  over  $10,000 .  17,000,000 

Iron  advanced  beyond  pig,  slabs,  and  loops  400,000 

Iron,  railroad  reroiled .  582,000 

Iron,  pig .  2,000,000 


Iron,  railroad .  426,000 

Iron  castings  for  bridges .  100,000 

Iron,  malleable .  100,000 

Keys,  actions,  and  strings  for  musical  in¬ 
struments . .' . 125,000 

Lamps  and  lanterns .  50,000 

Moldings  for  picture-frames,  Ac .  5,000 

Mineral  waters,  Ac .  125,000 

Mineral  coal  of  all  kinds .  1,250,000 

Metallic  nickel,  quicksilver,  manganese, 

cobalt,  Ac .  12,000 

Metallic  zinc .  50,000 

Masts,  spars,  and  ship  clocks .  45,000 

Oxide  of  zinc .  60,000 

Paper,  books,  charts,  and  book-binding .  2,072,000 

Productions  of  stereotypers,  qleetrotypers, 

lithographers,  and  engravers .  60,000 

Photographs . 25,000 

Plows,  cultivators,  harrows,  straw  and  hay 
cutters, planters,  seed-drills,  horse-rakes, 

and  winnowing-mills.. .  1,500,000 

Paints  and  colors .  50,000 

Putty. .  1,000 

Paraffine  oil  and  crude  petroleum .  2,100,000 

Quinine,  morphine,  Ac .  12,000 

Repairs .  730,000 

Railroad  chairs,  ship -spikes,  ax-poles, 
hoi’se-shoes,  rivets,  horse-shoe  nails, 
nuts,  washers,  bolts,  vises,  iron  chains, 

anchors,  anvils .  350,000 

Roman  and  water-cement  and  lime .  144,000 

Starch .  100,000 

Soap .  33,000 

Steel . 300,000 

Spelter .  10,000 

Saleratus,  soda  ash,  caustic  soda,  crude 

soda,  bicarbonate  of  soda,  Ac .  50,000 

Sulphate  of  barytes .  30,000 

Spindles  and  castings  for  locks  and  ma¬ 
chinery  .  300,000 

Stoves  in  part  of  cast  iron  and  sheet  iron 

or  soapstone .  50,000 

Sails,  tents,  awnings,  and  bags .  125,000 

Tin  cans .  25,000 

Umbrellas  and  parasols .  111,000 

Vegetable,  animal,  and  fish  oil .  600,000 

Value  of  bullion  used  in  wares  and  in 

watches . .  20,000 

Vinegar . •. .  50,000 

White  lead  and  whiting .  78,000 

Yeast  powders . 

Yarn  and  warp .  400,000 

Licenses .  13,000 

Naphtha .  5,000 

Slaughtered  animals .  1,200,000 

Schedule  A .  1,350,000 

Schedule  C  (receipts) .  200,000 

Freights .  4,850,000 

Salt . 200,000 

Soap  (additional) .  300,000 

Steam-engines,  Ac . 350,000 

Tobacco .  650,000 

Brokers’  sales .  500,000 

Savings  banks .  50,000 

General  tax  reduced  from  six  to  five  per 

cent .  12,000,000 

Telegraphs .  125,000 


$75,684,000 


Not  estimated. 

Bristles,  flavoring  extracts,  deerskins,  oakum,  ver¬ 
digris,  illuminating  gas  of  educational  institutions, 
paintings  andstatues,  aniline  colors,  bleaching-pow- 
ders,  tar,  turpentine,  candle  wickinfl 


Printed  at  the  Congressional  Globe  Office. 


